RPT-Lifting U.S. crude export ban would help counter Russia- oil CEO

(Repeats with no change to text)

By Timothy Gardner

WASHINGTON, March 26 Lifting the 40-year ban on
U.S. crude exports is the fastest way the American drilling boom
could be used to bolster energy security in Europe and Ukraine
in the face of Russian aggression, the CEO of the biggest
operator in North Dakota's vast oil fields will tell lawmakers
on Wednesday.

In the wake of Russia's invasion and annexation of the
Crimean region of Ukraine, several U.S. lawmakers have
introduced bills pushing the Department of Energy to speed
approvals of U.S. liquefied natural gas exports from more than
20 projects.

The extra U.S. LNG, the argument goes, would provide Europe
an alternative to gas supplies from Russia, from which it gets
nearly a third of its fuel, or at least it would help lower
prices in natural gas markets.

But the first U.S. project to export LNG from the United
States to countries with which Washington does not have free
trade agreements would not launch until late next year. Other
projects would take years longer as billions of dollars of
equipment needs to be built. In addition, Ukraine lacks an LNG
port, and Turkey does not allow LNG tankers to reach the country
through the Bosphorus straits.

"While opening LNG exports is a noble goal and one that we
as a country are actively working towards, the fact is the
infrastructure to undertake large scale overnight LNG exports
does not currently exist," Harold Hamm, the chairman and CEO of
Continental Resources Inc, will tell lawmakers at a House of
Representatives Foreign Affairs Committee hearing slated for 10
am/1400 GMT on Wednesday.

"If we want to have an overnight impact on today's global
events, we can immediately begin exporting crude oil, which does
not have the same infrastructure constraints" as LNG, he will
say, according to prepared remarks.

Hamm could benefit from an easing of the export ban by
selling more of the crude from the Bakken North Dakota
oilfields, where Continental is the biggest lease holder.

DROP IN THE SEA

The idea that U.S. crude exports could make a big difference
in Europe is not shared by everyone. Michael Levi, a fellow at
the Council on Foreign Relations who will also testify at the
hearing, has written that the ability of U.S. oil exports to
weaken Russian President Vladimir Putin's hand is less powerful
than many think.

U.S. exports would be "a drop in an already large sea" and
much of Europe is unable to quickly switch to different oil
types because of infrastructure bottlenecks, he wrote in a blog.

The United States, Russia and Saudi Arabia are the world's
top oil producers.

While pressure is building on the administration of
President Barack Obama to lift the ban that originated from the
oil price shocks of the 1970s, few analysts think an outright
reversal will come anytime soon.

The United States still imports much of its oil, so it could
be a few years before it has so much that most companies will
need to find new markets. In addition, no major legislation to
lift a ban currently exists, in part because few lawmakers in an
election year want to support a measure that could be blamed for
having the potential to raise motor fuel prices.

Still, Obama could create a new category of export licenses
as a matter of national interest, as has been done for bits of
the market in the past. President Ronald Reagan did so with U.S.
crude exports to Canada, while Bill Clinton allowed exports of
Alaskan crude.

The administration could also allow export licenses on a
case-by-case basis of batches, if it is in the national interest
and if a company is able to prove the oil could not be marketed
in the United States.

Worries about higher fuel prices resulting from a reversal
of the ban could be overdone, according to one analyst.

Elizabeth Rosenberg, director of the energy, environment and
security program at the Center for a New American Security, will
tell the lawmakers that lifting the ban could raise some crude
prices in line with global benchmarks.

But a broad hike in fuel prices at gasoline stations would
be unlikely, and most U.S. motor fuel prices could even drop
several cents per gallon, she will tell lawmakers.

If the ban is not overturned, it could push U.S. crude
producers to eventually slow output, which could undermine
global energy security. "Without the crude export relief valve,
oil companies will pull back on what will be increasingly
uneconomic production," she will tell the hearing, according to
prepared remarks.
(Editing by Ken Wills)

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